Which of the Following Is an Assumption Made in the Money-Creation

question 101

Multiple Choice

Which of the following is an assumption made in the money-creation process?

• A) Banks only lend to borrowers who they know will pay them back.
• B) Banks hold no excess reserves.
• C) Banks lend out all deposits and hold no reserves.
• D) Banks hold all deposits as vault cash.
• E) Individuals do not deposit any currency in a bank.

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